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Mindanao rates seen rising by as much as P4/kWh

Gov’t allots P4B for co-ops’ acquisition of generators

By: Amy R. Remo, April 2nd, 2013 11:53 PM

Energy Secretary Carlos Jericho L. Petilla

Power rates in Mindanao may shoot up by as much as P4 a kilowatt-hour should the electric cooperatives on the island agree to the proposed solution of the government for them to acquire their own diesel-fired generators.

On the sidelines of a meeting with Mindanao-based electric cooperatives yesterday, Energy Secretary Carlos Jericho L. Petilla noted that the price increase would be felt only during the short-term and would vary depending on how long the generators would run. The estimated range of P1.80 to P4 a kWh assumed that the modular generators would be running four to 10 hours a day.

Mindanao suffers from daily outages lasting two to six hours. As of Tuesday, the power supply deficit stood at 155 megawatts.

“I’m giving [the cooperatives] as many choices as I can. Unfortunately, there isn’t much. There will be power in Mindanao in 2015 but under certain conditions. And the conditions are basically for the electric cooperatives to have contracted new capacities,” Petilla said. “So the option from now up to 2015 is to rent or purchase gensets, which are going to be very expensive.”

“Electric co-ops are not obliged to choose one option. They can choose not to choose. That means the people will suffer. There are electric co-ops that said that they can’t raise prices so they would rather have the brownouts. So far, 20 out of 24 electric co-ops are [amenable to the options],” he further said.

Although the proposed solution remained an option for the electric cooperatives, Petilla stressed the need to acquire the gensets as utilities must have their own embedded capacities that could be tapped in time of emergencies.

The energy chief added that the renting or buying of gensets was the most immediate solution to the worsening power crisis in Mindanao, out of a total of three that were presented again in a meeting yesterday.

The other two solutions included the Interruptible Load Program (ILP), wherein entities with excess capacities can use their power facilities, instead of sourcing power from the main grid, and the Interim Mindanao Energy Market (IMEM), which will serve as a trading platform where entities can sell their excess capacities, subject to compensation based on market prices.

According to Petilla, the Department of Energy has earmarked P4 billion for the gensets. The budget will be sourced from the Malampaya funds and will be given to electric co-ops in the form of loans.

Mindanao-based electric co-ops are given three options, the first of which (Option 1) is to rent the gensets at an estimated cost of P1.4 million a megawatt a month. The available gensets can generate 1 to 2 MW and Petilla said he expected some 35 MW of genset capacities to be readily available by end-April.

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